2023 (5) TMI 333 - AT - Central Excise

Refund claim not time-barred, interest calculated from specific date.

Commissioner of CE & ST (LTU), Mumbai Versus M/s. Asian Paints Ltd. And M/s. Asian Paints Ltd. Versus Commissioner of CGST, Navi Mumbai

The Tribunal held that the refund claim was not barred by limitation as duty was paid under protest. Interest on the refund was to be calculated from ... Refund claim - time limitation - relevant date for grant of interest - interest for the period 2002 to November 2010 - interest for the period 30.11.2010 to October 2017 - HELD THAT:- From the facts as recorded in the order of the Commissioner appeal dated 28.03.2017 it is quite evident that issue before the Commissioner (Appeals) was in respect of the rejection of the refund claim filed by the Appellant assessee on 14.11.2006 consequent to the decision of Hon’ble High Court of Bombay in RUBBERWOOD INDIA (P) LTD. VERSUS COMMISSIONER OF CUSTOMS (APPEALS), COCHIN [2006 (2) TMI 552 - CESTAT, BANGALORE]. Commissioner (Appeals) has held that the said refund claim is not barred by limitation. Though the appellant assessee had referred to the rejection of the refund claim made by them vide the letter dated 29.07.2002, by the original authority, the arguments made against such rejection did not find any favourable finding from the Commissioner (Appeal). This order is under challenge by the Revenue in appeal No E/86570/2017. Appeal filed by the appellant assessee needs to be adjudged in their favour holding that the relevant date for computing the interest under Section 11BB would be the date of acknowledgement of the application for the refund made under Section 11B (1) and not the date of submission of the documents - the issue involved in the remaining two appeals which are against the order dated 25.08.2020, is adjudged in the favour of appellant assessee and against revenue - appeal filed by the revenue challenging the grant of interest for the period from 30.11.2010 to October 2017 is dismissed. Issues Involved:1. Whether the refund claim is barred by limitation.2. Determination of the relevant date for grant of interest on the refund.3. Entitlement to interest for the period 2002 to November 2010.4. Incorrectly granted interest for the period 30.11.2010 to October 2017.Issue-wise Comprehensive Details:1. Whether the refund claim is barred by limitation:The Tribunal examined whether the refund claim filed by the appellant on 14.11.2006 was barred by limitation. The Commissioner (Appeals) had held that the claim was not time-barred, noting that the duty was paid under protest, thus the limitation period did not apply as per Section 11B(1) proviso. The Tribunal upheld this finding, referencing the Supreme Court's decision in Mafatlal Industries [1997 (89) ELT 247 (SC)], which stated that refunds consequent to final orders in appeals are not governed by Section 11B's limitation period. The Tribunal dismissed the revenue's appeal on this ground.2. Determination of the relevant date for grant of interest on the refund:The Tribunal considered the relevant date for computing interest on the delayed refund. The Commissioner (Appeals) had directed that the date of submission of documents be taken as the date of filing the refund application. However, the Tribunal, relying on the Supreme Court's decision in Ranbaxy Laboratories [2012 (27) STR 193 (SC)], held that interest is payable from three months after the date of receipt of the initial refund application. Consequently, the Tribunal allowed the appellant's appeal, stating that the relevant date for interest calculation is three months from 14.11.2006.3. Entitlement to interest for the period 2002 to November 2010:The Tribunal adjudicated that the appellant was entitled to interest from three months after the date of receipt of the refund application, which was 14.11.2006. This decision was based on the consistent interpretation of Section 11BB of the Central Excise Act, 1944, which mandates interest on delayed refunds from the expiry of three months from the date of the refund application.4. Incorrectly granted interest for the period 30.11.2010 to October 2017:The Tribunal dismissed the revenue's appeal challenging the grant of interest for the period from 30.11.2010 to October 2017. The Tribunal reiterated that the interest should be calculated from three months after the date of the initial refund application (14.11.2006), thereby upholding the appellant's entitlement to interest for the entire period of delay.Final Orders:1. Appeal No E/86570/2017 (Revenue) is dismissed.2. Appeal No E/86002/2019 (Assessee) is allowed.3. Appeal No E/85290/2021 (Revenue) is dismissed.4. Appeal No E/86137/2020 (Assessee) is allowed, confirming the relevant date for interest calculation as three months from 14.11.2006.